How Tim Cook's Trump strategy has made Apple a killer stock

In case you haven’t noticed, Apple’s (AAPL) stock is up a mind-blowing 50% over the past 12 months.

That’s a gain of some $300 billion in market value for shareholders, an incredible run for a company so large (never mind 2X the overall market’s gain.). Apple’s market capitalization is now $911 billion, the biggest of any publicly-traded company and, of course, the biggest ever. (Amazon, btw, is worth a mere $631 billion.)

I don’t know if Apple will become the first company worth $1 trillion, but I do know that the performance of the stock has everything to do with not only the company’s products, but also with Apple CEO Tim Cook’s management of what has become an increasingly key element of succeeding as a CEO in America. That being a Trump strategy.

Yes, Cook brought the iPhone X to market with generally good reviews and sales, apparently signaling another upcycle for Apple’s most important product, the iPhone. But just as important, he has figured out what President Trump and — to my mind by extension — the markets want to hear.

Before I get into to that, a quick look back at Cook’s tenure. Since he took the helm in August of 2011 (two months before Steve Job’s death)—the stock has soared 228% (i.e. more than tripled.) That’s versus 125% for the S&P 500. On the one hand, yes, Cook was teed up for success by a genius, once-in-lifetime CEO. On the other hand, Cook had huge shoes to fill, and more to the point, has not rolled out any revolutionary new products a la Steve. Naysayers said that unless he did that Apple’s stock would falter. To the contrary, it has thrived. Why? In large part because the iPhone’s growth has mitigated that need.

Tim Cook, CEO of Apple, speaks as President Donald Trump listens during an American Technology Council roundtable in the State Dinning Room of the White House, Monday, June 19, 2017. (AP Photo/Alex Brandon)

Now on to what I mean about Cook’s Trump strategy. First ask yourself what the president wants from American companies. Jobs, jobs, jobs (No pun intended.) And in America, of course. Well, ask and you shall receive Mr. President. With the latest announcements from Apple, see January 17, “Apple accelerates US investment and job creating,” (note “accelerates”) the company has delivered, promising to invest $350 billion in the US, and create 20,000 new jobs. The company also said it would pay stock bonuses to employees.

Then there’s this, from May, “Harrodsburg, Kentucky — Apple today announced Incorporated will receive $200 million from Apple’s new Advanced Manufacturing Fund as part of the company’s commitment to foster innovation among American manufacturers.”

And in what could be the latest parlor game for CEOs, Apple also announced that it will be building a big new campus somewhere in the US to be announced later this year. This follows Amazon’s savvy, second-HQ rollout, that has generated breathless press coverage (Yahoo Finance included), never mind mayors falling all over themselves to give these juggernauts tax breaks. Nice.

Couple this with various interviews Cook has given, where he not only extolls the virtues of Apple’s products, but also speaks to Apple’s bullishness on America. Of course, it’s hard to quantify the effect of all this, but I suggest that not only has also this campaign put Apple in good stead with Trump, but also with the stock market, particularly the most recent announcements.

And look, I’m not saying Apple wouldn’t have done this if Hillary Clinton had been elected (although maybe not quite so loudly), and for sure Apple wouldn’t make these moves if it didn’t make sense. I’m just saying that Cook, like other CEOs, has changed the way he does business—yes, to a degree—because of Trump.

I should note that Cook hasn’t been shy about publicly criticizing Trump about his policies as well—on DACA, Charlottesville and climate change for instance. I would argue that Cook’s greatest accomplishment is that he has been able to have it both ways: Blast Trump when he disagrees with him, and simultaneously look to curry favor with him. It’s a good management, right?

“When I heard the news yesterday—and Tim Cook is a great guy, the head of Apple—when I heard the news, I heard $350 billion and I said, ‘You mean $350 million; that is going to be a beautiful plant,’ and they said ‘No,’ they said ‘It is $350 billion,”’ Trump said in a speech at a factory in Coraopolis, Pennsylvania, a Pittsburgh suburb. “I just called Tim Cook and thanked him, but I don’t imagine there has ever been an investment that big in our country by a company.”

For Tim Cook, Apple and Apple shareholders, that’s a very valuable pat on the back.